Bond yields spike to four month high: Mecklai

Bond yields are rising persistently since start of March 2011 and yesterday it touched four month high of 8.76 on the back of lackluster demand for the first two government papers in the first auction of financial year 2012-13. The first devolvement forced primary dealers to buy the unsubscribed portion which has hurt the market sentiment among bond traders that are pressurizing on bond yields. This indicates that market participants warrant higher yields whereas the central bank is not comfortable with such a high yields.

The factors that are responsible for yields to stay at higher levels are firstly, the central bank has kept its benchmark rate unchanged and higher inflation should uphold its decision unchanged in its next policy meeting; secondly in Union budget the government announced the borrowing of Rs3.7 lakh crore in the first half of the fiscal year about 65% of the gross borrowing programme and thirdly huge supply lined up are likely to keep GOI bond yields elevated and under pressure.

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Shriram Transport to raise Rs 750 cr via NCD issue

The NCDs have been rated AA/stable by CRISIL and AA+ by CARE. The rating of the NCDs by CRISIL indicates high degree of safety with regard to timely servicing of financial obligations and carrying very low credit risk, while the rating of NCDs by CARE indicates high safety as regards timely servicing of financial obligations and carrying very low credit risk.

The issue shall be open from July 16, 2013 to July 29, 2012 with an option to close earlier and/or extend up to a period at the discretion of the duly authorised committee of directors of the company subject to necessary approvals.

The funds raised through this issue will be used for various financing activities including lending and investments, to repay existing loans and for business operations including capital expenditure and working capital requirements.

JM Financial Institutional Securities Private Limited, A K Capital Services Limited, HDFC Bank Limited and ICICI Securities Limited are the lead managers to the issue, while Karvy Investor Services Ltd, RR Investors Capital Services Private Limited, SMC Capitals Ltd and Trust Investment Advisors Private Ltd are the co-lead managers to the issue.

IDBI Trusteeship Services Limited is the debenture trustee, while Integrated Enterprises (India) Limited is the registrar to the issue.

Shriram Transport Finance Company's primary focus is on financing pre-owned commercial vehicles. In addition, the company also provides finance for new commercial vehicles, passenger commercial vehicles, multi-utility vehicles, three wheelers and tractors. In addition, it provides ancillary equipment and vehicle parts finance, such as loans for tyres and engine replacements, and provides working capital facility for FTUs and SRTOs.

The NCDs offered are proposed to be listed on the National Stock Exchange and BSE.

Freeport's Grasberg Mine Operates at Full Capacity - ...

According to Reuters, Freeport McMoRan Copper and Gold Inc.'s (FCX) PT Freeport Indonesia (PT-FI) Grasberg operations in Papua, Indonesia, is currently operating at full capacity.

Freeport had announced a force majeure on shipments from PT-FI Grasberg mine after the collapse of a tunnel at the mine on May 14 that took 28 lives. While the accident occurred outside the area of mining operations, Freeport temporarily suspended mining and processing activities at the Grasberg complex as a part of the rescue and recovery operation.

However, last month, Freeport announced that it had resumed open pit mining and concentrating activities at the mine and was operating at 60% capacity after it received approval from Indonesia's Department of Energy and Mineral Resources (DEMR).

The closure of operations at the world's second largest copper mine affected production. The Indonesian operation lost about 115 million pounds of copper and 115,000 ounces of gold after the closure of the mine. It is apprehended that on a daily basis the mine lost about 3 million pounds of copper and 3,000 ounces of gold. The impact of the ongoing suspension of underground operations approximates 1 million pounds of copper and 1,000 ounces of gold per day.

Freeport released its first-quarter 2013 results in Apr 2013. The company's Indonesian operation recorded copper sales of 198 million pounds in the quarter, higher than 134 million pounds a year ago. Gold sales declined roughly 28% year over year to 191,000 ounces due to lower ore grades from mine sequencing.

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Freeport's adjusted earnings (excluding one-time charges) of 73 cents per share for the first quarter beat the Zacks Consensus Estimate by a penny but missed the year-ago earnings of 96 cents.

Including debt extinguishment costs for the ter! mination of the acquisition bridge loan facilities and acquisition costs, net income for the quarter was $648 million, or 68 cents per share. This represents roughly 15% fall from the prior-year quarter's net income of around $764 million or 80 cents per share. The results were affected by higher costs and lower copper prices.
Revenues fell roughly 0.5% year over year to $4.58 billion in the first quarter, missing the Zacks Consensus Estimate of $4.81 billion.

Freeport currently holds a short-term Zacks Rank #3 (Hold).

Brigus Gold Corp (BRD), Claude Resources, Inc. (CGR) and Lake Shore Gold Corp. (LSG) are currently performing well in the mining industry. While Brigus Gold holds a Zacks Rank #1 (Strong Buy), Claude Resources and Lake Shore Gold retain a Zacks Rank #2 (Buy).

Bull of the Day: Cree (CREE) - Bull of the Day

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Now that we are in the heart of earnings season, many investors are zeroing in on company reports to drive the market. While investors seem to be pretty bullish on financials for this quarter, one segment that may also provide some earnings growth is technology.

However, not just any tech company will do, as you will need to drill down into a few key segments for strong earnings growth. In particular, the semiconductor segment could be an interesting choice, thanks to the high Zacks Industry Ranks for this space, and the surging stock prices of many companies in this corner of the tech world. A number of semiconductor firms fit this bill as solid investments during this time frame, but one stands out for its promise this earnings season; Cree (CREE).

CREE in Focus

Cree is a North Carolina-based company that focuses on LED products that are used in a number of applications including game displays, automobiles, signage, among others. Beyond their LED division, the company also makes power conversion products, Radio Frequency-based items, and semiconductor materials as well.

The firm is becoming increasingly well-known as demand increases for energy efficient applications across the board. Plus, it doesn't hurt that the firm's stock has risen by almost 200% in the past 52 weeks alone. While this is obviously an already amazing level of stock price growth, there is plenty of reason to believe that this trend can continue, especially if you look to earnings estimates for the company.

Estimate Picture

The consensus is looking for earnings growth of 87.5% for the current quarter and then 100% growth for the next quarter. Meanwhile, for the current year and next year periods, earnings growth is expected to come in at a robust 60%+ for both periods.

Estimates have also been rising lately, with all in the past 90 days risi! ng. In fact, the most recent analyst estimates—for the next quarter and next year periods—were up 10%, suggesting that expectations are continuing to rise for CREE.

While this might be concerning to some investors, especially with the lofty growth that is baked into the company's projections, CREE does have a good track record of beating or meeting analyst expectations. The firm has met or beat expectations in all five of the last earnings reports, including double digit beats in two of the last four.

Thanks to these factors, the company has earned itself a Zacks Rank #1 (Strong Buy), suggesting that the firm could outperform in the months ahead as well. Plus, the stock has a Zacks recommendation of Outperform, meaning that the longer term look is also favorable.

To top things off, the Zacks Industry Rank for this corner of the Semiconductor market is ranked extremely well. In fact, the industry is actually the highest ranked one, bar none, in our classification system, suggesting that the space is well poised to rise this earnings season too.

Bottom Line

As companies try to become more energy efficient, Cree's products look to become more in demand. This could continue to boost CREE's surging stock, and make this top ranked firm a solid investment.

This is especially true given how bullish many analysts are on the company and the firm's solid history at earnings season. And then when you add in the number one overall Zacks Industry Rank, investors could definitely still have a winner on their hands with this interesting tech company.

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Is Peabody Energy Oversold?

With shares of Peabody Energy (NYSE:BTU) trading around $20, is BTU an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let's analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

T = Trends for a Stock’s Movement

Peabody Energy is a private-sector coal company that owns interests in 28 active coal mining operations located in the United States and Australia. In addition to the company’s mining operations, Peabody Energy markets and brokers coals from its operations and other coal producers, both as principal and agent, and trades coal and freight-related contracts through trading and business offices. It conducts business through four principal segments: Western United States. Mining, Midwestern U.S. Mining, Australian Mining and Trading and Brokerage. Coal prices have been on the decline over the last several years for several reason. Although cheap, consumers and businesses are opting for cleaner and more efficient sources of energy. At this point, the company may need to see a significant rise in coal as a source of energy in order to see gains into the future.

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T = Technicals on the Stock Chart are Weak

Peabody Energy stock has seen on the decline for the last couple of years and is now trading at prices not seen since the lows established during the 2008 Financial Crisis. Lower stock prices may be ahead if the stock makes a clear break below these key stock price levels. Analyzing the price trend and its strength can be done using key simple moving averages. What are the key moving averages? The 50-day (pink), 100-day (blue), and 200-day (yellow) simple moving averages. As seen in the daily price chart below, Peabody Energy is trading below its declining key averages which signal neutral to bearish price action in the near-term.

(Source: Thinkorswim)

Taking a look at the implied volatility (red) and implied volatility skew levels of Peabody Energy options may help determine if investors are bullish, neutral, or bearish.

	Implied Volatility (IV)	30-Day IV Percentile	90-Day IV Percentile
Peabody Energy Options	41.72%	0%	0%

What does this mean? This means that investors or traders are buying a very minimal amount of call and put options contracts, as compared to the last 30 and 90 trading days.

	Put IV Skew	Call IV Skew
May Options	Flat	Average
June Options	Flat	Average

As of today, there is an average demand from call buyers or sellers and high demand by put buyers or low demand by put sellers, all neutral to bearish over the next two months. To summarize, investors are buying a very minimal amount of call and put option contracts and are leaning neutral to bearish over the next two months.

On the next page, let’s take a look at the earnings and revenue growth rates and the conclusion.

E = Earnings Are Decreasing Quarter-Over-Quarter

Rising stock prices are often strongly correlated with rising earnings and revenue growth rates. Also, the last four quarterly earnings announcement reactions help gauge investor sentiment on Peabody Energy’s stock. What do the last four quarterly earnings and revenue growth (Y-O-Y) figures for Peabody Energy look like and more importantly, how did the markets like these numbers?

	2013 Q1	2012 Q4	2012 Q3	2012 Q2
Earnings Growth (Y-O-Y)	-114.29%	-558.02%	-84%	-28.57%
Revenue Growth (Y-O-Y)	-14.27%	-9.55%	3.94%	0.91%
Earnings Reaction	7.57%	5.56%	11.81%	-11.26%

Peabody Energy has seen increasing earnings and revenue figures over the last four quarters. From these figures, the markets have been pleased with Peabody Energy’s recent earnings announcements.

P = Poor Relative Performance Versus Peers and Sector

How has Peabody Energy stock done relative to its peers, Arch Coal (NYSE:ACI), BHP Billiton (NYSE:BHP), Consol Energy (NYSE:CNX), and sector?

	Peabody Energy	Arch Coal	BHP Billiton	Consol Energy	Sector
Year-to-Date Return	-23.07%	-31.42%	-12.83%	8.57%	-14.14%

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Peabody Energy has been a relative underperformer, year-to-date.

Conclusion

Peabody Energy provides coal energy products and services to a wide range of companies in various industries worldwide. The stock has been in a steep decline for the last few years but may be stabilizing at these current prices. Earnings and revenue figures have been decreasing, over the last four quarters, but investors have been pleased with what they’ve heard during the earnings reports. Relative to its peers and sector, Peabody Energy has been one of the worst performers, year-to-date. STAY AWAY from Peabody Energy for now.

AUXILIO Reports Q2 2013 Financial Results (OTCMKTS:AUXO)

AUXILIO, Inc. (AUXO)

Today, AUXO surged (+3.26%) up +0.030 at $.950 with 200 shares in play thus far (ref. google finance Delayed: 9:30AM EDT August 23, 2013).

AUXILIO, Inc. previously reported financial results for its quarter ended June 30, 2013.

For the three months ended June 30, 2013, AUXILIO reported that recurring service revenues increased by $1.4 million from new contracts closed between May 2012 and April 2013; however revenues were $9.8 million, a decrease of 8% when compared to revenues of $10.7 million in the same period of 2012, due to a drop in equipment revenue. Equipment sales were $800,000 as compared to $3.1 million for the same period in 2012. Cost of revenues were $8.2 million for the three months ended June 30, 2013, as compared to $9.3 million for the same period in 2012. This drop was due to the drop in equipment sales offset by additional staffing and service costs from the higher recurring service revenue. Gross profit for the second quarter of 2013 was $1.6 million, or 17% of sales, compared to $1.4 million, or 13% of sales, for the same period of 2012. This improvement is a direct result of the large growth in new facilities that we added in 2012 coupled with the reduction in costs as AUXILIO's program matures within these new accounts.

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AUXILIO, Inc. (AUXO) 5 day chart:

Logansport Financial Corp. Reported Net Earnings (OTCBB: LOGN, OTCMKTS:CLNO)

Logansport Financial Corp. (LOGN)

Today, LOGN remains (0.00%) +0.000 at $23.25 thus far (ref. google finance Delayed: 10:11AM EDT July 25, 2013).

Logansport Financial Corp. previously reported net earnings for the quarter ended June 30, 2013 of $462,000 or $.71 per diluted share, compared to earnings in 2012 of $427,000 or $.54 per diluted share. Year to date the company reported net earnings of $936,000 for 2013 compared to $763,000 for 2012. Diluted earnings per share for the six months ended June 30, 2013 were $1.43 compared to $.97 for the six months ended June 30, 2012. Total assets at June 30, 2013 were $165.8 million compared to total assets at December 31, 2012 of $172.9 million. Total shareholder's equity at December 31, 2013 was $18.6 million compared to $19.0 million at June 30, 2012

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Logansport Financial Corp. (LOGN) 5 day chart:

Cleantech Transit, Inc. (CLNO)

Cleantech Transit, Inc. (OTCMKTS:CLNO) (www.cleantechtransit.net ) through its Discovery Carbon subsidiary, develops emissions offset strategies for companies, municipalities, and countries. Today, CLNO has surged (+4.05%) up + 0.007 at $.180 with 33,560 shares in play thus far (ref. google finance Delayed: 12:49PM EDT July 25, 2013).

CLNO's daily range is at ($.19 – $.17) thus far and currently at $.180 would be considered a (+16263.63%) gain above the 52 wk low of $.0011. The stock is up +0.18 ( +7400%) since the concerning dates of January 28, 2013 – July 25, 2013. +7400% is the 6 month high and rightly so.

Cleantech Transit, Inc. (CLNO ) 5 day chart:

Senate Panel Okays 33% SEC Budget Hike, Setting Up House Tussle

The Senate Appropriations Committee approved Thursday a $1.674 billion budget for the Securities and Exchange Commission in fiscal 2014, fulfilling the 33% increase that was requested by the Obama Administration, and awarding the agency with $353 million above the level enacted in fiscal year 2013.

However, the Senate budget differs significantly from the GOP-controlled House proposal that would provide the SEC with $1.4 billion, only $50 million above the Commission's 2013 budget.

SEC Chairwoman Mary Jo White has been pressing for more funding so that she can add more examiners for RIAs. She told the House appropriations committee in early May that the agency’s $1.67 billion budget request for fiscal 2014 would help it fulfill one of its top priorities: to add 250 examiners for advisors.

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Observers believe finding a compromise will be difficult, however, and is unlikely to occur before the current fiscal year ends Sept. 30.

The Senate Appropriations Committee also awarded the Commodity Futures Trading Commission with $315 million in 2014, $110 million above the fiscal year 2013 enacted level of $205 million. The IRS was given $12.07 billion in 2014, an increase of $276.5 million above the fiscal year 2013 enacted level.

Sen. Tom Udall, D-Colo., chairman of the Appropriations Subcommittee on Financial Services and General Government, said it was “critical” for the SEC and CFTC to receive the added funding as “the responsibilities of these agencies are growing geometrically.”

The 250 RIA examiners, White said, would increase the proportion of advisors examined each year, the rate of first-time examinations and the examination coverage of investment advisors and newly registered private fund advisors.

Ask The Expert: Does Contrarian Investing Really Work?

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If you'd like us to answer one of your investing questions in our weekly Ask The Expert Q&A column, email us at editors@investinganswers.com. (Note: We will not respond to requests for stock picks.)

Question: Does being an investing contrarian actually work? Will I make money going against the market?

-- Jim S., Chicago, IL

Contrarian investing carries a special attraction for many investors. Not only does being a contrarian frequently present an opportunity to produce outsize gains, it can also be a thrill and big boost to the ego to bet against the masses and go against the grain.

Adding greater allure to the attraction of being a contrarian are the escapades of legendary hedge-fund billionaires scoring huge gains executing contrarian strategies. That includes John Paulson's $12 billion profit in 2007 after bucking popular opinion and making huge bets against housing. Fellow hedge-fund billionaire David Einhorn of Greenlight Capital Management also dazzled Wall Street in 2011 after shorting Green Mountain Coffee Roasters (Nasdaq: GMCR) before the stock's epic implosion, netting Einhorn and his firm hundreds of millions in profits.

But the reality behind these glamorous headlines is that being a contrarian is extremely risky and carries a low probability of success. And there are a few very good reasons for that.

One of the most popular contrarian strategies is shorting a stock or entire industry with a high price-to-earnings ratio. But the problem with shorting stocks is that the stock market spends a lot more time going up than going down. Since 1950, the S&P 500 is up an eye-popping 9,458%.

That rising equity tide tends to lift all stocks, making it difficult to profit on a short even with an industry laggard or struggling company. Take a look at the huge gains the S&P 500 has produced in the last 63 years.
The second challenge of being a contrarian is timing the market. A successful contrarian investment requires perfectly timing a turn in sentiment, but even the most successful investors in the industry acknowledge that market timing is the toughest game in town.

That played out with the United States Natural Gas ETF (NYSE: UNG) in the past five years. With the natural gas market crashing from its record high in the summer of 2008, many contrarian investors were quick to buy on the big drop anticipating a reversal. But four years later, prices are still deeply depressed, equating to huge losses for any contrarian investors calling a bottom in the last few years.

Remember, even if the logic behind a contrarian investment is rock solid, that doesn't mean it will be profitable, thus the saying: "The market can stay irrational longer than most investors can stay solvent." Take a look below at the huge decline in natural gas that wreaked havoc on contrarian investors looking to go against the grain in the last few years.

The third reason being an effective contrarian is so challenging is a matter of time, expertise and resources. It's important to understand that effective contrarian investing requires identifying an opportunity that the rest of the market is completely missing. And between the largest institutional players on the Street -- including banks and hedge funds -- there are tens of thousands of forensic financial analysts and high-frequency computer models pouring over every single piece of market data in the world.

If this group of highly trained professionals with the best resources and incentives is missing a big contrarian opportunity, it is highly unlikely that a one-person operation with limited experience and resources is going to beat the Street and capitalize on a short-term anomaly.

Generally speaking, the best strategy for most investors is to work with an adviser and keep it relatively simple. Investors don't need to score 1,000% gains to be extrem! ely profi! table and successful in the market. Great investing is built upon patience and discipline.

Action to Take --> Contrarian investing sounds glamorous, but the reality is that going against the grain is extremely risky and carries a low probability of success. Most investors should focus on keeping it simple, with the core of their portfolios invested in low-cost index funds. That will keep your portfolio in tune with the market's bullish trend while limiting fees and expenses to a minimum.

This article was originally published at InvestingAnswers.com
Ask the Expert: Does Contrarian Investing Really Work?

Cytokinetics' Update on Study - Analyst Blog

Cytokinetics, Incorporated (CYTK) recently provided an update on BENEFIT-ALS (Blinded Evaluation of Neuromuscular Effects and Functional Improvement with Tirasemtiv in ALS), the phase IIb study being conducted on its amyotrophic lateral sclerosis (ALS) candidate, tirasemtiv.

The company reported a programming error in the multinational, double-blind, randomized, placebo-controlled study which is evaluating the safety, tolerability and efficacy of tirasemtiv.

Cytokinetics' data management vendor reported that due to a programming error in the electronic data capture system controlling study drug assignment, 58 patients received placebo at a certain study visit instead of tirasemtiv.

The company said that no incorrect treatment was conducted on the patients in the placebo arm. Cytokinetics said that the company as well as trial site personnel remained blinded to the 58 patients affected by the error.

Cytokinetics is taking measures to confirm that no other such errors have been made and the programming defect has been corrected. Cytokinetics also conducted an ad hoc meeting of the study`s Data Safety Monitoring Board (DSMB) to determine that the safety of the 58 patients affected by the error has not been impacted. The DSMB reviewed the safety data and reported that there were no concerns regarding patient safety.

Patient enrolment for the BENEFIT-ALS study is ongoing – the study, which is designed to enroll up to 500 patients, has enrolled 450 patients so far. Cytokinetics said that it may change the current protocol so as to enroll additional patients.

The company is working with regulatory authorities on the most suitable way to respond to the error so that the intended scientific value of BENEFIT-ALS may be maintained.

Our Take

We do not expect the programming error to have a major impact as the study remains blinded and the error was detected well before final analysis. Moreover, the safety profile was not impacted.

Still, we b! elieve the company will most likely amend the protocol and enroll additional patients. On its first quarter 2013 conference call, the company had said that results from the BENEFIT-ALS study would be out by year end. However, enrolment of additional patients could push out study results by a few months to early 2014. Study costs will also go up.

An update on the company's plans should be available following discussions with regulatory authorities.

Cytokinetics currently carries a Zacks Rank #2 (Buy). We expect investor focus to remain on results from the ATOMIC-HF study that is evaluating omecamtiv mecarbil in patients with left ventricular systolic dysfunction who are hospitalized with acute heart failure. The company intends to present results in late August-early September.

At present, companies that look well-positioned include Biogen Idec (BIIB), Peregrine Pharmaceuticals, Inc. (PPHM) and Cytori Therapeutics, Inc. (CYTX). All three are Zacks Rank #1 (Strong Buy).

Steven Romick Comments on Hewlett Packard, Google, Interpublic, WPP

Steven Romick made valuable remarks on several of his holdings in his fourth-quarter letter:

Hewlett Packard (HPQ) We purchased a small position in Hewlett Packard (HPQ) as part of a tech basket in 2011. Although the tech basket performed reasonably well, HPQ was a mistake – not just because we have lost money thus far, but also because we allowed rationalization to creep into our process. We established a small, toehold position at an average price just over $40, believing that the P/E was just 8x, that the printing business was an annuity, and that the services business had sustainable cash flow at current (or better) levels. Subsequent research revealed that neither business was as resilient as we thought. Instead of selling our stake at that time, though, we argued that the stock price remained cheap enough to stay in the basket. We were wrong. HPQ management made a series of reckless decisions, including a multi-billion dilutive acquisition; a publicly announced commitment to WebOS that was retracted within a month; and declaring their intention to sell their PC business without having a buyer lined up (leaving customers to worry about who would stand behind the products in the future, and undermining sales efforts aimed at IT departments).

Nevertheless, we do not believe Hewlett Packard is a Wang Laboratories. The stock ultimately declined to $21.50, but we added to our position at lower prices, and the stock increased to $25.76 at year-end. We are mindful that when a big asset bubble finally bursts, the ramifications are large, and the time to resolution is usually long. Take housing for example. The drinking binge of easy money has created a five year hangover, and counting. The housing market remains weak, but does seem to be bumping along a bottom. We have made a number of investments exposed to the housing sector, e.g., Lowes, mortgage whole loans, and some small bank positions.

On the emerging economies front, economic growth has been reasonably good, but the perf! ormance of their respective bourses has not (they declined far more than their U.S. counterparts). It's ironic that our debtor nation is still viewed as a safe haven, while the creditor nations are viewed as more risky. We suspect that such accepted wisdom of today will be turned on its ear tomorrow. In general, smaller domestic businesses don't have much of a foreign footprint; as a result, faster growth overseas disproportionately benefits the larger, global companies, and it's in those companies that we continue to maintain a greater concentration. We do not do much in emerging markets directly, but we do continue to seek those investments domiciled in more developed markets that have exposure to up-and-coming economies (typically, those are bigger companies).

In the second half of the year, Crescent established new positions in a few companies that have more such global footprints. We initiated investments in Google, as well as the advertising agencies Interpublic and WPP. The fortunes of all three are tied directly to the level of global advertising spend, and they all saw their shares prices decline due to concerns of a recession-related slowdown. At our purchase price, we believe we were buying each at roughly 11-13x our estimated earnings for 2012 should the fears of a macroeconomic slowdown prove correct. This strikes us as a very reasonable multiple to pay for asset-light global businesses that generate strong free cash flow across the business cycle and have the capability to grow earnings greater than GDP in a normal economic environment.

Of the three, we expect Google to grow revenue the fastest, IPG to demonstrate the greatest improvement in operating margins, and WPP to fall in the middle on each measure. Regardless, at the prices we paid, the market was according little progress to any of these prospects, and that allowed us to purchase each position at a price that provided an attractive margin of safety in all but the most pessimistic of outcomes. Should the valuati! ons of an! y of these names retrace over the coming year we would expect to accumulate on weakness and increase our position sizes. In fact, at the right price, we would very much like to see this collection of companies account for a demonstrably greater exposure than where the weighting currently stands. We continue to focus our long equity book on larger, higher-quality businesses that trade at reasonable valuations and that have great balance sheets, as well as attractive dividend yields (when possible). The portfolio characteristics listed below reflect the current direction, with a weighted average P/E, Price/Book, and Debt/Capital at less than our historic average, while the fund's Market Capitalization, Return on Equity and Dividend Yield are above average.

Google, Interpublic and WPP

In the second half of the year, Crescent established new positions in a few companies that have more such global footprints. We initiated investments in Google (GOOG), as well as the advertising agencies Interpublic (IPG) and WPP (WPP). The fortunes of all three are tied directly to the level of global advertising spend, and they all saw their shares prices decline due to concerns of a recession-related slowdown. At our purchase price, we believe we were buying each at roughly 11-13x our estimated earnings for 2012 should the fears of a macroeconomic slowdown prove correct. This strikes us as a very reasonable multiple to pay for asset-light global businesses that generate strong free cash flow across the business cycle and have the capability to grow earnings greater than GDP in a normal economic environment.

Of the three, we expect Google to grow revenue the fastest, IPG to demonstrate the greatest improvement in operating margins, and WPP to fall in the middle on each measure. Regardless, at the prices we paid, the market was according little progress to any of these prospects, and that allowed us to purchase each position at a price that provided an attractive margin of safety in all but the most pe! ssimistic! of outcomes. Should the valuations of any of these names retrace over the coming year we would expect to accumulate on weakness and increase our position sizes. In fact, at the right price, we would very much like to see this collection of companies account for a demonstrably greater exposure than where the weighting currently stands.

We continue to focus our long equity book on larger, higher-quality businesses that trade at reasonable valuations and that have great balance sheets, as well as attractive dividend yields (when possible). The portfolio characteristics listed below reflect the current direction, with a weighted average P/E, Price/Book, and Debt/Capital at less than our historic average, while the fund's Market Capitalization, Return on Equity and Dividend Yield are above average.

See Romick's complete portfolio here.

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Sign up for Dividends from John Hancock

This fund is basically an actively managed mutual fund, but it just happens to trade on an exchange, explains income specialist Ari Charney of Big Yield Hunting.

Income-oriented investors will appreciate this closed-end fund's mandate, which requires it to deliver high current income along with modest capital gains.

John Hancock Premium Dividend Fund (PDT) tends to allocate roughly 30% to 40% of the portfolio to equities and 60% to 70% to preferred stock, with the utilities and financial sectors as its main focus.

Management does use substantial leverage to boost its payout and returns, but it's done so while delivering excellent long-term returns.

Over the past five years, utilities have taken up as much as 61% of assets, while financials are currently at their highest weighting over that period.

The seasoned management team, one of whom has been with the fund for over 18 years, tends to invest with conviction. In fact, portfolio turnover has averaged just 14% over the past five years.

I also reviewed the fund's performance during the Fed's last tightening cycle, which ran from June 2004 though September 2007. Over that period, PDT still managed to gain 4.5% annually on a net asset value (NAV) basis, 0.9% annually on a price basis, and 7.2% annually on a price basis with the reinvestment of distributions.

So, a rising-rate environment clearly poses a challenge, though the fund should be able to hold its value, while continuing to pay its distribution.

And, in contrast to many of its peers, PDT's monthly distribution typically consists of net investment income and the occasional long-term capital gain, without any destructive returns of capital.

Aside from rates, of course, I'm also concerned that yield-starved investors have pushed both utilities and preferreds higher and higher, without regard to price. But I trust the management team's value-oriented approach to keep them from chasing the high flyers.

The financial sector's dominance of preferred stock issuance could soon change, as the Federal Reserve has ruled that it will no longer allow bank holding companies to count trust preferreds toward Tier 1 capital, though it will grandfather existing preferreds for smaller institutions. It remains to be seen how these changes will affect the preferred market.

Finally, investors should be aware of the fund's dividend reinvestment program (DRIP). New investors are automatically enrolled, so if you prefer to receive the distribution as cash, you'll have to opt out of it.

But the DRIP also offers a significant benefit: Whenever shares trade at a premium to NAV, distributions are reinvested at the NAV or at 95% of the market price.

So, at the very least, DRIP participants will never pay the market price when PDT trades at a premium. When it trades at a discount, reinvestments are done at the prevailing market price.

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5 Best Warren Buffett Stocks To Own Right Now

Have you heard what the CEO of Warren Buffett's favorite bank is saying about the housing market? Its more than just words; it's where the bank is putting its money, too!

Wells Fargo (NYSE: WFC  ) CEO John Stumpf has been making the media rounds of late, with the housing market on his mind. Stumpf leaves no question about his viewpoint on the subject; Stumpf, and by extension Wells, think that U.S. housing is back.

Putting your money where your mouth is
"Housing for two-thirds of Americans is still the American Dream. I'm bullish on housing."

This quote puts Wells Fargo's view on housing in no uncertain terms. And Wells' financial statements back up that sentiment. Wells' biggest business is mortgage lending, contributing 26% of total non-interest income in the first quarter. That was the sixth consecutive quarter of mortgage production greater than $100 billion.

5 Best Warren Buffett Stocks To Own Right Now: Medical Action Industries Inc.(MDCI)

Medical Action Industries Inc. develops, manufactures, markets, and supplies various disposable medical products primarily in the United States. It offers custom procedure trays that include orthopedic, cath lab/radiology, labor and delivery, cardiac, ophthalmology, tissue procurement, neurology, robotic, gynecological, vascular, urology, cosmetic/plastic surgery, anesthesia/pain, bariatric, and general/other trays; minor procedure kits and trays, such as central line dressing, suture removal, laceration, incision and drainage, general purpose instrument, wound dressing change, sharp debridement, venipuncture, ear and ulcer syringes, trach care, and irrigation trays, as well as razor and shave prep kits, piston syringes, and I.V. start kits; and operating room disposables and sterilization products comprising surgical marking pens, needle counters, light shields, convenience kits, surgical headwear and shoe covers, isolation gowns, instrument protection, eye-shields, sutur e boots, basin separators, reel cutters, patient aids, crutches, walkers, canes, patient slippers, O.R. basins, magnetic drapes, guide wire bowls, bowie dick test packs, vessel loops, anti-fog solutions, heat sealers, and tray liners. The company also provides patient bedside products consisting of wash basins, bedpans, pitchers and carafes, urinals, emesis basins, soap dishes, medicine and denture cups, tumblers, sitz baths, service trays, and perineal bottles; dressings and surgical sponges, which include burn dressings, sponge counting systems, elastic nets, and bandage rolls; containment systems for medical waste, such as waste solidifier and spill cleanup kits, and equipment dust and sterility maintenance covers; and laboratory products comprising petri dishes, containers, collectors, calculi strainers, and vials. It sells its products primarily to acute care facilities through a network of direct sales personnel. The company was founded in 1977 and is headquartered in Brentwood, New York.

5 Best Warren Buffett Stocks To Own Right Now: 1st Source Corporation(SRCE)

1st Source Corporation operates as the bank holding company for 1st Source Bank that provides commercial and consumer banking services to individuals and businesses in the United States. Its consumer banking services include checking accounts, online and telephone banking, savings programs, installment and real estate loans, home equity loans, lines of credit, drive-through and night deposit services, safe deposit facilities, automated teller machines, debit and credit card services, financial literacy seminars, and brokerage services. The company also offers commercial, small business, agricultural, and real estate loans for various general corporate purposes, including financing for industrial and commercial properties, equipment, inventories, accounts receivables, and acquisition; and commercial leasing and cash management services. In addition, it provides a range of trust, investment, agency, and custodial services comprising administration of estates and personal tru sts, as well as the management of investment accounts for individuals, employee benefit plans, and charitable foundations. Further, the company offers equipment loan and lease finance products for auto and light trucks, environmental equipment, medium and heavy duty trucks, new and used aircraft, and construction equipment; and leases construction equipment, medium and heavy duty trucks, automobiles, and other equipment. Additionally, it provides corporate and personal property, casualty, and individual and group health and life insurance products and services to individuals and businesses; and investment advisory services to trust and investment clients. As of December 31, 2011, the company operated through 75 banking center locations in 17 counties in Indiana and Michigan; and 23 locations of its Specialty Finance Group in the United States. 1st Source Corporation was founded in 1962 and is headquartered in South Bend, Indiana.

Hot Cheap Companies To Invest In Right Now: Omnicell Inc.(OMCL)

Omnicell Inc. provides automated solutions for hospital medication and supply management primarily in the United States and Canada. The company offers medication use products, which include OmniRx that automates the management and dispensing of medications at the point of use; SinglePointe, a software product that controls medications on a patient-specific basis; AnywhereRN, a software that allows nurses to remotely operate automated dispensing cabinets; Pandora Analytics, a reporting and data analytics tool; and Savvy Mobile Medication System, a mobile platform for hospital information systems. Its medication use products also include OmniLinkRx, a software product that automates communication between nurses and the pharmacy; WorkflowRx, an automated storage, retrieval, inventory management, and repackaging solution; controlled substance barcode inventory management system; and Anesthesia Workstation, a secure dispensing system for the management of anesthesia supplies an d medications. In addition, the company provides medical and surgical supply products, which comprise Omnicell Supply Solution that automates the management and dispensing of medical and surgical supplies at the point of use; Supply/Rx Combination Solution, which manages medications and supplies in one versatile cabinet; Omnicell Tissue Center that manages the chain of custody for bone and tissue specimens; OptiFlex SS, which supplies modules for the perioperative areas; OptiFlex CL that supplies modules for the cardiac catheterization lab and other procedure areas; and OptiFlex MS, a system for the management of medical and surgical supplies. Further, it provides customer education and training, and maintenance and support services. The company was formerly known as Omnicell Technologies, Inc. and changed its name to Omnicell, Inc. in 2001. Omnicell, Inc. was founded in 1992 and is headquartered in Mountain View, California.

5 Best Warren Buffett Stocks To Own Right Now: Norseman Gold Plc(NGX.AX)

Norseman Gold plc, through its subsidiary, Central Norseman Gold Corporation Limited, engages in the exploration and development of mineral resources in Australia. The company primarily focuses on gold and silver. It holds interests in the Norseman project covering an area of approximately 2,360 square kilometers comprising 221 tenements that consist of 85 exploration licences, 5 exploration licence applications, 108 mining leases, 3 prospecting licences, 4 prospecting licence applications, 15 miscellaneous licences, and 1 mining lease application located in the southern extent of the Norseman-Wiluna Greenstone Belt of the Eastern Goldfields Province of the Yilgarn Block, Western Australia. The company also holds the Fraser Range projects comprising iron ore located south-east of Norseman. Norseman Gold plc was founded in 2006 and is headquartered in Burswood, Australia.

5 Best Warren Buffett Stocks To Own Right Now: John Bean Technologies Corporation (JBT)

John Bean Technologies Corporation provides technology solutions for the food processing and air transportation industries in the United States and internationally. It operates in two segments, JBT FoodTech and JBT AeroTech. The JBT FoodTech segment offers industrial food processing solutions and services used in the food processing industry. Its product offerings include freezer solutions for the freezing and chilling of meat, seafood, poultry, ready-to-eat meals, fruits, vegetables, and bakery products; protein processing solutions that portion, coat, and cook poultry, meat, seafood, vegetable, and bakery products; in-container processing solutions for fruits, vegetables, soups, sauces, dairy, and pet food products, as well as ready-to-eat meals in various packages; and fruit processing solutions that extract, concentrate, and aseptically process citrus, tomato, and other fruits. This segment markets its solutions and services to multi-national and regional industrial fo od processing companies. The JBT AeroTech segment provides ground support equipment for cargo loading, aircraft deicing, and aircraft towing; gate equipment for passenger boarding, and on the ground aircraft power and cooling; airport services for the maintenance of airport equipment, systems, and facilities; military equipment for cargo loading, aircraft towing, and on the ground aircraft cooling; and automatic guided vehicles for material handling in the automotive, printing, warehouse, and hospital industries. This segment markets its solutions and services to airport authorities, passenger airlines, airfreight and ground handling companies, and military forces. John Bean Technologies Corporation sells and markets its products and services through direct sales force, independent distributors, and sales representatives. The company is based in Chicago, Illinois. John Bean Technologies Corporation operates independently of FMC Technologies, Inc. as of July 31, 2008.

The Gory Details on Smart Technologies's Double Miss

Smart Technologies (Nasdaq: SMT  ) reported earnings on May 16. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q4), Smart Technologies missed estimates on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue contracted significantly. Non-GAAP loss per share grew. GAAP loss per share increased.

Gross margins grew, operating margins shrank, net margins dropped.

Revenue details
Smart Technologies reported revenue of $105.2 million. The three analysts polled by S&P Capital IQ predicted net sales of $114.7 million on the same basis. GAAP reported sales were 29% lower than the prior-year quarter's $148.0 million.

Top 5 Gold Stocks To Invest In 2014

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at -$0.10. The five earnings estimates compiled by S&P Capital IQ averaged -$0.05 per share. Non-GAAP EPS were -$0.10 for Q4 against -$0.04 per share for the prior-year quarter. GAAP EPS were -$0.16 for Q4 compared to -$0.02 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 43.3%, 360 basis points better than the prior-year quarter. Operating margin was -12.5%, 680 basis points worse than the prior-year quarter. Net margin was -17.8%, much worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $134.2 million. On the bottom line, the average EPS estimate is $0.06.

Next year's average estimate for revenue is $512.4 million. The average EPS estimate is $0.15.

Investor sentiment
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 60 members out of 69 rating the stock outperform, and nine members rating it underperform. Among 11 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 11 give Smart Technologies a green thumbs-up, and give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Smart Technologies is outperform, with an average price target of $2.45.

Is Smart Technologies the best tech stock for you? You may be missing something obvious. Check out the semiconductor company that Motley Fool analysts expect to lead "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

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Why the Dow Should Have Ended Higher Than It Did Last Week

Last week the Dow Jones Industrial Average (DJINDICES: ^DJI  ) rose 99.53 points, or 0.64%. The index set new all-time record highs during a number of the days last week and currently sits at a new high at 15,658.36. But the Dow should have ended the week much higher than it did. Only seven of the 30 components ended the session lower, while the other 23 moved higher. Of those 23, 12 climbed by more than 1% -- and eight of those 12 increased more than 2%. Among those seven losers, six moved lower by more than 1%, and only two dropped more than 2%.

So what happened? The problem was that some of the Dow's most heavily weighted stocks were the big decliners, while some of the more lightly weighted ones were the top winners. Chevron (NYSE: CVX  ) , ExxonMobil (NYSE: XOM  ) , and Verizon, the Dow's biggest losers last week, fell by a respective 2.04%, 2.99%, and 1.5% -- and combined, those stocks carry 13.1% of the Dow's total weight.

Meanwhile, the index's top three winners -- DuPont, Cisco, and Hewlett-Packard -- rose a respective 3.92%, 2.7%, and 3.88%, but together they account for just 5.54% of the index.

Furthermore, the Dow's most heavily weighted stock, IBM (NYSE: IBM  ) , lost 1.11% this week. Combine that with all the Dow's losers this past week (the others were Alcoa, Intel, and Coca-Cola), and you get an index weighting of 26.17%. But with no weighting, seven stocks out of 30 would account for just 23.33% of the index.

In short, the Dow's weighting system kept it from reaching even greater all-time highs.

Many of my colleagues have spoken on the subject of trying to find a better alternative to the Dow's weighting system. Many would argue that the S&P 500's (SNPINDEX: ^GSPC  ) system -- which goes by each stock's market capitalization -- is better than the Dow's system, which assigns weighting by stock price alone. The problem is that even the S&P 500 misses out on the dividends investors receive and how those payments affect the overall return of a stock or the market in general.

One thing investors can do if they want dividends added into their calculations for market growth is to follow the Standard & Poor's Total Return Index, which takes those quarterly payments into account.

In the end, all weighting systems have their problems, but understanding their limitations can at least help you see why indexes like the Dow don't always perform the way you might expect them to. But these systems are the best we have, and for better or worse, we're probably stuck with them.

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Exploding Home Prices Support Stocks

Blue-chip stocks are holding onto record highs this afternoon after new data showed that home prices are growing at the fastest rate in nearly seven years. With roughly an hour left in the trading session, the Dow Jones Industrial Average (DJINDICES: ^DJI  ) is up 10 points, while the S&P 500 (SNPINDEX: ^GSPC  ) is up by about two points.

The S&P/Case-Shiller 20-city index of home prices for the month of February was released this morning. The data showed that home prices in the nation's largest metropolitan areas increased by 0.3% over the preceding month and 9.3% over the same month last year. It was the largest such improvement since May 2006. According to an economist quoted by Bloomberg News, "The recent run up in prices probably has a lot to do with the lack of supply."

Shares of homebuilders are nevertheless lower on the news, with the industry's largest player, DR Horton (NYSE: DHI  ) , off by 2.3% at the time of writing. The ironic reaction to these stocks is likely the result of the sector's recent run-up in price. As my colleague Rick Munarriz noted over the weekend, homebuilders were some of the hottest stocks in the market last week following DR Horton's blowout quarterly earnings.

In addition to positive news out of the housing sector, there's also reason to believe that Americans are feeling more optimistic about the economy than expected. The Conference Board released figures for its consumer confidence index for the month of April. The figure came in at 68.1 compared with an upwardly revised reading of 61.9 for the preceding month. Economists surveyed by MarketWatch had expected it to be 61.3. According to the organization's director of economic indicators:

Consumer Confidence improved in April, as consumers' expectations about the short-term economic outlook and their income prospects improved. However, consumers' confidence has been challenged several times over the past few months by such events as the fiscal cliff, the payroll tax hike and the sequester. Thus, while expectations appear to have bounced back, it is too soon to tell if confidence is actually on the mend.

In terms of individual stocks, Verizon (NYSE: VZ  ) is among the best-performing stocks on the Dow. Fellow Fool Doug Ehrman recently discussed how the company's investment strategy -- centered around "bringing broadcast capabilities to wireless" -- is disrupting the cable industry. If the telecommunications giant succeeds in these endeavors, it stands to profit tremendously.

Alternatively, the worst-performing component on the blue-chip index is Pfizer (NYSE: PFE  ) , which is down by 3.7%. The pharmaceuticals giant reported earnings this morning that missed analyst estimates. Excluding one-time items, EPS came in at $0.54 per share, missing the consensus forecast by $0.02. In addition, Pfizer lowered its earnings forecast for the remainder of the year. To read more about this, check out Dan Dzombak's take on it here.

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Facebook: Now Regulator-Approved

A significant shift is under way in the ways companies are allowed to disclose material public information to shareholders and the public. Championed by Netflix (NASDAQ: NFLX  ) CEO Reed Hastings, social media has become a new outlet for information to be disseminated on a more official basis. Having used Facebook (NASDAQ: FB  ) as a test case, Hastings continues to look toward social media to let the public know about important developments.

In the following video, Fool.com contributor Doug Ehrman discusses how the rules have changed and why this could be a significant win for Facebook looking ahead.

After the world's most-hyped IPO turned out to be a dud, most investors probably don't even want to think about shares of Facebook. But there are things every investor needs to know about this company. We've outlined them in our newest premium research report. There's a lot more to Facebook than meets the eye, so read up on whether there is anything to "like" about it today, and we'll tell you whether we think Facebook deserves a place in your portfolio. Access your report by clicking here.

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